Australia's largest phone company Telstra may be forced to split in two to reconcile the need for a nationwide broadband network.

The communications minister Helen Coonan said making Telstra separate its retail and network businesses was one option being considered.

Telstra's plans to build a broadband network stalled over pricing after two years of negotiations with regulators.

Australia's former telecoms monopoly was privatised in 2006.

Competition

The government now plans to hold an open tender for the building of the broadband network, but may make Telstra split its businesses first so there is a level playing field between rival bidders.

A rival consortium headed by Optus, which is a unit of Singapore Telecom, has also put forward proposals to build a fibre-to-the-node (FTTN) network and other companies are also understood to be considering putting forward proposals.

Broadband internet speeds have become a political issue ahead of federal elections, which are expected to be held next month.

The opposition Labor Party has proposals to speed up the building of the network, which also involve breaking up Telstra.

Last week, New Zealand's government decided that Telecom Corp of New Zealand would have to be broken up into three operating units to speed up the introduction of its own broadband networks.